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Wednesday, March 30, 2011

KLCI Stock - NOTION / 0083 - 2011 Quarter 1

Company Info
Market Capital (Capital Size)323,033,280 (Small)
Par ValueRM 0.50

My Analysis
Forecast P/E now(2.09-0.045)/0.24 = 8.52 (Moderate)
Target Price2.40+0.045 = 2.44 (PE 10.0, EPS 0.24, DPS 0.045)
DecisionNot interested unless earthquake impact is clearer
Revenue increased 13.2% and also higher than preceding year corresponding quarter 6.5%, if exclude derivative gain still increased 42.8% from preceding quarter, eps increased but lower than preceding year corresponding quarter, almost can generate cash from operating due to payables decreased, repayment of bank borrowings have to pay attention because is almost quarter of total cash, liquidity increased from low to moderate level, gearing ratio decreased at moderate level now, working capital per sales increased, all accounting periods are good now especially payables period decreased, affecting by weakening USD but got USD and EURO currency hedging to stabilize the effect of a strong ringgit, impacted by the Sendai earthquake
First Support Price1.7
Second Support Price1.6

Research House
HwangDBS Target Price2.5 (2011-01-24)
RHB Target Price2.17 (2011-02-22)
ECM Target Price2.5 (2011-03-21)
OSK Target Price1.85 (2011-03-23)
Maybank Target Price2.4 (2011-03-24)
HLG Target Price2.69 (2011-03-28)

Accounting Ratio
Return on Equity15.78%
Dividend Yield2.15%
Profit Margin26.33%
Tax Rate14.83%
Asset Turnover0.5756
Net Asset Value Per Share1.57
Net Tangible Asset per share1.57
Price/Net Tangible Asset Per Share1.31
Cash Per Share0.24
Liquidity Current Ratio2.1738
Liquidity Quick Ratio1.6405
Liquidity Cash Ratio0.5452
Gearing Debt to Equity Ratio0.6696
Gearing Debt to Asset Ratio0.3998
Working capital per thousand Ringgit sale34.8%
Days to sell the inventory68
Days to collect the receivables99
Days to pay the payables53

My notes based on 2011 quarter 1 report (number in '000):-
- For 1Q of FY2011 the Group recorded revenue of RM60.0 million (4QFY2010 : RM53.0 million) and PAT of RM13.4 million (4QFY2010 : RM8.2 million) and earnings per share of 8.65 sen (4QFY2010 : 5.23 sen). The improvement in PAT of about RM5.3 million is mainly attributable to the higher revenue contributed from camera segment

- The Group recorded PBT of RM15.8 million as compared to the immediate preceding quarter of RM6.7 million, an increase of 136%

- For the current year todate, total revenue of RM60.0 million and PAT of RM13.4 million is 6.6% higher and 4.3% lower respectively compared to the corresponding period of the preceding year revenue of RM56.3 million and PAT of RM14.0 million

- n Q4FY2010, HDD parts revenue recorded RM20.8 million (Q4FY2010: RM18.3 million), camera parts recorded RM29.9 million (Q4FY2010: RM25.6 million) whilst the industrial/automotive revenue was at RM9.3 million (Q4FY2010: RM9.1 million). The product mix for Q1FY2011 was HDD:Camera:Industrial/Automotive of 35%:50%:15% compared to previous quarter's mix of 35%:48%:17%

- Estimate next 4Q eps after 2011 Q1 result announced = 0.06*4 = 0.24, estimate PE on current price 2.09 = 8.52(DPS 0.045)
- Estimate next 4Q eps after 2010 Q4 result announced = 0.0523*4*0.9 = 0.1883, estimate highest/lowest PE = 11.44/8.2 (DPS 0.045)
- Estimate next 4Q eps after 2010 Q3 result announced = 0.0192*3+0.0806 = 0.1382(It may take 3Q to apply corrective measures to control costs, minimise rejects and maximise its production capacity), estimate highest/lowest PE = 15.16/10.67 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q2 result announced = 0.3788 (0.1804*2 = 0.3608, 5% grow from 0.3608), estimate highest/lowest PE = 8.65/5.24 (DPS 0.025)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.3674, estimate highest/lowest PE = 9.44/7.57 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q4 result announced = 0.0185*4 = 0.074, estimate highest/lowest PE = 11.62/9.95 (DPS 0.03)
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0158*4 = 0.0632, estimate highest/lowest PE = 8.39/5.49 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0065*4 = 0.026, estimate highest/lowest PE = 13.46/9.23 (DPS 0.01)
- Estimate next 4Q eps after 2009 Q1 result announced = 0.0103*4 = 0.0412, estimate highest/lowest PE = 6.8/3.64 (DPS 0.01)

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